Actavis plans to approach Allergan about a potential merger, as the Botox maker warms up to the possibility of a sale. Jeanne Yurman reports.
The takeover battle over botox maker Allergan continues to play out like something from Game of Thrones. The latest player to be brought back into the saga...Pharmaceutical company Actavis. It plans to approach Allergan, which is said to be warming up to the idea of a sale IF a takeover proposal amounts to an offer which values the company north of $200 per share. Actavis has been talking with Allergan informally for months and now would like to take a hard look at buying the company and may reach out to Allergan as soon as this week. The comes as Valeant and its partner Pershing Square's Bill Ackman are gearing up to offer a sweetened bid by about $15, which translates into valuing Allergan at $190 a share--far short of that Actavis figure. Meanwhile Allergan has deployed its latest weapon to fend off Ackman and Valeant's unwanted bid: a preliminary injunction. It aims to prevent Ackman, who's angling for six seats on the board at the December 18th board meeting, from voting his nearly 10 percent stake. The reasoning? Pershing and and Valeant are operating based on insider information and it should be prevented from voting the proxies it collects in the formal proxy fight the hedge fund launched at the end of September. Shares of both Allergan and Valeant have been edging up in the premarket while Actavis shares remain relatively unchanged. BMO's analyst David Maris says Allergan investors would prefer getting equity in a combined Actavis-Allergan than a cash payout, even at $200 plus. However, Maris also says... "We believe an independent Allergan remains most attractive, and we continue to see Allergan's independent value, supported by our DCF methodology, at $230 per share. While a combination with another specialty pharma or large-cap buyer is possible, we believe equally likely is Allergan's doing its own deal and/or a buyback." Stay tuned. Lots more drama is apt to come in this pharma takeover tale.